Entrepreneurship And Self-Selection Theory

entrepreneurship, it is believed that the higher risk tolerance people accept, the higher probability to enter entrepreneurship they have. Moreover, every entrepreneurial decision needs risk tolerance because the outcome of each investment is unexpected (Caliendo, 2014).

Regarding to self-selection, because of the volatile wages in small firms, risk-averse employees prefer to work in large firms where they may sacrifice flexibility and autonomy (Benz and Frey, 2008). It means that risk-averse employees who want to become entrepreneurs will stay in the same occupation, adversely the risk- loving ones will want to change the occupation sector in case of entrepreneurship entry. If these predictions are right, it leads to the opposite result to Hypothesis 3.

Hypothesis 6(base on Parker’ Hypothesis 4, 2009): related to self-selectin based on individual risk attitudes, the probability of entrepreneurial entry among job-changing employees may have a negative relationship with remaining in the same occupation.

As the implication of self-selection theory, in case of entrepreneurship exit and return to paid-employment, risk- loving people will work as employees in small firms because the personal risk attitudes are constant over the time.

People are called extraversion if they are gregarious, outgoing, warm, and friendly they are energetic, active, assertive, and dominant in social situations; they have more positive experience in emotions and optimistic views; and they seek excitement and stimulation (Zhao et al, 2010). All components of the factor are positive related to choose entrepreneurship entry (Ciavarella et al., 2004). Among employees who choose paid-employment in small firms or large ones. It can be expected that extraversion workers want to work in the place where they can have splendid experience and communicate with all kind of social network and small firms are more seemly their destination rather large